May 2025 Construction News: East Midlands Sees Surge in Project Starts Despite Drop in Contract Awards 

As the UK construction sector continues to navigate economic fluctuations and policy shifts, the East Midlands construction industry is showing both resilience and challenges. In May 2025, notable increases in project starts have bolstered the region’s development pipeline, even as main contract awards fell sharply. For employers, contractors and candidates in the construction sector, these trends from our May 2025 Construction News offer crucial insights. 

Key Highlights: East Midlands Construction News (May 2025) 

• £2.3 billion in project starts across the East Midlands (up 30% year-on-year) 

• Private housing leads with £1.12 billion in starts (49% of total value) 

• Social housing projects up 248% year-on-year, totalling £311 million 

• Utilities sector growth: up 94% year-on-year, now £268 million in value 

• Contract awards fall 52% compared to previous quarter 

• Planning approvals strong: up 43% year-on-year 

These trends signal a shift in where construction activity is occurring and that they’re favouring early-stage development over awarded contracts. 

Construction News: Long-Term Optimism Amid Short-Term Uncertainty 

While main contract awards in the East Midlands dropped significantly, falling 42% year-on-year to £898 million, there are positive signs in early-stage development. This suggests developers are optimistic, but cautious due to high input costs and regulatory barriers. 

Major Developments: 

• Major project starts (£100m+) fell 19% quarter-on-quarter 

• Underlying project starts (sub-£100m) surged 45% YoY to £1.66bn 

• Planning approvals rose 43% YoY, an indicator of future construction activity 

What’s Driving Construction Growth in the Midlands? 

Several factors are fuelling this mixed but promising recovery: 

1. Private Housing Recovery 

Private housing starts have doubled since last year, rising by 29% UK-wide and 49% in the East Midlands. This indicates renewed developer confidence despite continued mortgage rate pressures and the return of lower Stamp Duty thresholds. 

2. Social Housing Boom 

Investment in social housing has surged, driven by local council funding and housing association initiatives. The 248% increase from last year reflects a strategic effort to combat the UK’s housing crisis. 

3. Utility Infrastructure Growth 

With £268 million in starts, utility projects are booming which is driven by decarbonisation efforts and energy security initiatives. Water, energy and digital infrastructure remain top regional priorities. 

Construction Industry Outlook: Spring 2025 and Beyond 

According to the Construction Products Association’s Spring Forecast, UK construction output is expected to grow by 1.9% in 2025 and 3.7% in 2026. Recovery will be led by private housing and infrastructure, with major projects like HS2 and Hinkley Point C supporting demand. 

Potential Risks to Monitor: 

• Rising materials costs (especially insulation and concrete) 

• Supply chain disruption 

• Uncertain economic policy after April’s Stamp Duty reforms 

Still, cautious optimism is returning to the sector. The S&P Global UK Construction PMI® (a seasonally adjusted index tracking changes in total industry activity) rose to 47.9 in May, up from 46.6 in April. Any score below 50 indicates negative growth, but May’s reading was the nearest to has been to 50 since January’s 48.1 reading. It hasn’t been above 50 since last December. 

Tim Moore, economics director at S&P Global Market Intelligence, which compiles the monthly survey, said: “The construction sector continued to adjust to weaker order books in May, which led to sustained reductions in output, staff hiring and purchasing. However, the worst phase of spending cutbacks may have passed as total new work fell at a much slower pace than the near five-year record in February. 

“Housing activity was the weakest-performing segment in May as demand remained constrained by elevated borrowing costs and subdued confidence. Commercial work was close to stabilisation after a marked decline in April, suggesting that fears about domestic economic prospects have abated after the initial shock of US tariff announcements. 

“Output growth expectations across the UK construction sector recovered to the highest so far in 2025. Survey respondents mostly cited a general improvement in sales projections as well as a potential tailwind from falling interest rates over the year ahead. 

“On the inflation front, stubbornly high input price pressures were recorded in May, although the overall rise in purchasing costs was the least marked for four months. Many firms noted that suppliers continued to pass through greater payroll costs. 

“Rising wages, squeezed margins and subdued demand weighed on construction employment, despite a brighter outlook for business activity. Job shedding was the steepest since August 2020, while subcontractor usage decreased to the greatest extent for five years.” 

Why Recent Construction News Matters to Construction Professionals in the Midlands 

Whether you’re hiring, job-seeking or tendering for contracts, understanding these regional trends is key. The East Midlands is proving resilient, especially in early-stage project growth and housing-led investment. Candidates with skills in residential construction, consultancy, and infrastructure are in increasing demand. 

Despite falling contract awards, the East Midlands construction sector is on the brink of a strong recovery, led by residential and infrastructure development. With planning approvals and project starts trending upward, 2025 could mark a turning point for the region. 

Atkins Search Recruitment specialises in connecting skilled construction professionals with forward-thinking employers. If you’re looking to hire or make your next move, now is the time to act. 

Contact Atkins Search Recruitment today! We’re here to help you build what’s next. 

Explore our current opportunities. 

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FAQ’s: East Midlands Construction News May 2025 

What are the latest construction trends in the East Midlands? 

The East Midlands saw £2.3bn in project starts from February to April 2025 which is up 30% year-on-year. Private and social housing led the growth, while contract awards declined. 

Why did main contract awards decline in early 2025? 

Contract awards fell due to market uncertainty, high input costs, and policy changes like April’s Stamp Duty reforms, which shifted focus to pre-contract planning and development. 

Which construction sectors are growing fastest in the Midlands? 

Private housing, social housing and utility infrastructure are experiencing the fastest growth. Utilities alone grew by 94% year-on-year in the East Midlands. 

How is the UK housing market affecting construction? 

While housing transactions slowed in April due to Stamp Duty changes, the construction pipeline remains strong, especially in residential new builds and planning approvals. 

What does this mean for construction job seekers in the Midlands? 

Demand for project managers, site engineers, quantity surveyors and housing development experts are rising. Now is a great time to explore opportunities with expanding housing and infrastructure firms.